US: Foot Locker disappointed with third quarter loss
New York-based athletic footwear retailer Foot Locker has swung to a third quarter net loss of US$33m, from a net income of $65m in the same period last year, as store closures continue.
Foot Locker, which yesterday (20 November) opened the first of its first House of Hoops concept stores with Nike, reported Q3 sales down 5.2% to $1.36bn. Same-store sales, meanwhile, also fell 5%.
Its loss included a non-cash impairment charge and expenses associated with closing unproductive stores, totalling $66m, the company said.
The company closed 158 stores during the first nine months of the year, including 13 unproductive stores during the third quarter prior to normal lease expiration.
During the fourth quarter of 2007, the sportswear firm expects to open eight new stores and close up to 142 unproductive sites.
Year-to-date, the company has opened 112 new stores, and remodelled or relocated 179 stores, including its first store in Istanbul, Turkey.
At the start of November, Foot Locker operated 3,896 stores in 21 countries in North America, Europe and Australia. In addition, 10 franchised stores are currently operating in the Middle East and South Korea.
"Our third quarter sales were disappointing, reflecting a challenging external environment and the lack of exciting fashion trends in athletic footwear and apparel," said Matthew D Serra, Foot Locker's chairman and CEO.
"While our sales results fell short of our expectations, third quarter markdowns were approximately 12% lower than last year. Additionally, we continued to focus diligently on expense management."
For the first nine months of the year, the retailer reported a net loss of $34m, compared with net income of $138m in the prior year period. Year-to-date sales fell 3.5% to $3.9bn compared with sales of $4.1bn last year. Same-store sales dropped 5.8%.
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